The 'Hype Beasts' And $1K T-Shirts: Gen Z Cashes In On Billion-Dollar Limited Edition Retail Market
When cousins Jordan Stevens and Gus Hohlbein opened their upscale Green Lake thrift shop in 2015, “hype beasts” were not even on the radar.
Originally Lucky Dog Clothing only featured “timeless” brands like Nautica, Lacoste and Pendleton. Some of the pieces date back to the 1980s. Unlike a traditional consignment store, Lucky Dog pays sellers on the spot. Any unsold merchandise is donated.
While demand for these classic pieces was strong, it didn’t take long for the cousins to realize there was a big market for “hype” gear.
“We pivoted to the limited edition market because that’s what the customers were wanting and asking for,” Stevens said.
Hype products are produced in limited quantities and then resold for significantly more than the original retail price. Those who buy and collect these limited edition products are referred to as “hype beasts.”
Sales of hype brands, such as Supreme, Bathing Ape or Bape, Air Jordans and limited edition Adidas, now make up 50% of the store’s sales. In June, the cousins added an additional room to expand their hype selection.
Lucky Dog is a well-known establishment among the hype beasts. Its customer base includes several celebrities that both sell and buy, including rapper Macklemore and YouTube star Richie Le.
While many sales take place in-store, a good portion of their business is handled online through Instagram, Stevens said. Lucky Dog posts its hype products on Instagram and has followers around the country. While most are local, a good portion of the followers live in major metros like New York City.
When it comes to the hype limited edition trend, the skater clothing store Supreme has mastered the algorithm, Stevens said.
“There is a perception that there is more demand than supply,” he said. “That’s what makes their image stronger."
Supreme T-shirts produced in a limited batch of 300 retail for about $40. Those same shirts can resell for as much as $1K, he said.
So why doesn’t Supreme just make more shirts and more money? It would water down the image, Stevens said.
Supreme produces very little, but capitalizes on its strong appeal to make money off collaborations with other companies like Everlast, North Face, Louis Vitton and even Playboy, according to a Business Insider article.
While Supreme, which started out as a skater shop in 1994, is the best-known hype brand among the Gen Z crowd, other companies have picked up on the trend.
Adidas, for example, produces limited edition shoes like its pink-and-purple Pharrell Human Race that resell for $100 more than their retail price.
This is big business. The sneaker resale market alone is $1.5B, NPR reports. That doesn't include private sales that take place on platforms like Instagram.
Gen Zers as young as 12 recognize these brands and styles. Many wait for the companies to do a “drop” of their merchandise and snatch them up at the lower retail price and then immediately resell them through stores like Lucky Dog Clothing, or online companies like StockX.com.
In the resale world, buyers must beware, Stevens said. Buyers have to make sure it is from a reputable store or site. Knockoffs are common, and good sites and stores ensure the product's authenticity.
The average age of a Lucky Dog customer is about 22. Stevens said young kids often have allowances or money from jobs and few expenses. They are aware of what is trending and are willing to pay more for the hottest styles, Vice reports.
While Gen Z may not always be plopping down $450 for a pair of sneakers, Stevens believes this generation understands the value of limited editions and he thinks companies in other industries will soon follow suit.
Limited editions are common in the auto industry, but now even restaurants are finding hype by offering options like limited edition all-you-can-eat gift cards.
“Olive Garden’s all-you-can-eat cards were reselling for much more than the original retail price,” he said. “I won’t be surprised when more companies start selling limited editions. People are willing to pay more much more for it.”